The government has revealed how funds from Premium Bonds are used after they were quizzed in Parliament this week.
National Savings and Investments, or NS&I, gives away Premium Bonds prizes each month, with the backing of the Treasury and investment from the public who want a chance to win prizes.
Michael Wills, a Labour lord and former justice minister, asked the government to clarify how funds generated by Premium Bonds are used.
He said: “What is their estimate for each of the past three years of their returns from retaining the proceeds of cashed-in Premium Bonds for up to six days before they are transferred to the holder’s bank account?"
In response, Baroness Charlotte Vere, a Tory peer, said that NS&I provides “cost effective finance”.
She added: “It does this through offering savings products to consumers, including Premium Bonds.
"Funds raised by NS&I from these products, including Premium Bonds, flow to the National Loans Fund (NLF). The NLF is the Government’s main borrowing and lending account, and to this end, it undertakes borrowing (primarily by issuing gilts via the Debt Management Office) and uses proceeds and other central Government surplus balances, including funds from NS&I’s Premium Bonds, to manage its cash needs day-to-day."
"The Exchequer’s cash needs are managed on an aggregate basis, meaning funds raised from Premium Bonds are not held in a separate account and do not receive a separate rate of return (which in any case is determined by the market as the government is ultimately a price taker).
"Therefore, there is not a single rate of return on NS&I proceeds and it would not be possible to provide an estimate of returns from retaining the proceeds of Premium Bonds. When a customer divests their holdings of Premium Bonds, these repayments are also funded via the NLF’s activities and are typically processed within three working days.
"However, in exceptional circumstances, such as Bank Holidays, this may take longer. This process allows HM Treasury to manage Exchequer cashflows in a cost-effective manner."
How to check if you have won on Premium Bonds
You can check your account via the NS&I website.
Prize draws are conducted every month and see prizes up to £1,000,000 given away.
To find out if you have ever won a Premium Bonds prize, you will need to dig out your holder's information and head over to the prize checker.
You will need your holder’s number which you can find on your bond record, or in the app.
You can also use your NS&I number which you should be able to find on any communication about your bonds.
Premium Bonds are the UK's biggest savings product, with more than 24 million people saving over £122 billion in them, according to Money Saving Expert.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here